Homes That Can Be Difficult to Insure

Your home is likely your biggest asset. It’s worth protecting not only because it’s worth a lot of money, but also because without it, you won’t have a place to live.

Some homes can be difficult to insure for a variety of reasons — which are worth looking into before you buy a home and have to buy a homeowner’s insurance policy. Without insurance, your lender won’t approve a loan.

Here are some instances when homes can be difficult to insure:

Old age

A home built 50 years ago won’t necessarily be denied insurance coverage because it’s old, but old age may have caused some of its components to wear out and be more likely to break. If an old home has been refurbished, this may not be a concern.

Some insurers may not issue policies for homes with old plumbing, for example, fearing that the pipes aren’t up to current building codes and may have problems. The same goes for an aging electrical system or an old roof that needs replacing.

The unique building style of an old home such as a Victorian-era home can make it harder to insure because the interesting architectural features can be more expensive to repair.

Disaster areas

Hurricanes, earthquakes, floods, tornadoes and wildfires are some of the natural disasters that are more likely to happen in certain parts of the country. If your home is in an area where disasters strike often, a basic homeowner’s insurance policy may not cover that common peril.

You still may be able to buy insurance, but earthquake insurance in California, for example, will cost extra.

Insurers will be more likely to insure you if you’ve taken steps to mitigate damage. If you live in a hurricane-prone area, then installing storm shutters on the windows and straps to secure the roof may be enough to qualify for insurance.

Foreclosed or vacant homes

Getting a great deal on a foreclosed home can mean immediate savings on the purchase price, but insurance may be more expensive.

Foreclosed homes that have been vacant for a long time can deteriorate faster than occupied homes. The reason is simple — no one is living there to take care of problems. Squatters can also break into empty homes and destroy them, or evicted owners may damage a foreclosed home before leaving.

A home inspection can determine the extent of the problems, along with how much time the home will need to remain vacant while repairs are done.

During renovations, extra insurance may be necessary to cover vandalism, fire or other perils while the home is unoccupied.

Lengthy claims history

Even if you’ve never lived in the home you’re trying to insure, a lengthy claims history by previous tenants can drive up your insurance rates.

Buy a Home Seller’s Disclosure Report from C.L.U.E., the Comprehensive Loss Underwriting Exchange. The report has information on insurance claims filed at the home during the past five years.

Too many claims can mean there’s a major maintenance problem waiting to be fixed.

Vacation homes

Vacation homes are usually empty for most of the year, allowing problems such as leaky pipes to cause major damage and go undetected for awhile.

They can also be attractive targets for thieves, causing the need for burglar alarms and other steps to prevent break-ins.

Insurers may not be too keen on insuring vacation homes, but insurance can be easier to get if you’ve taken extra precautions and ask neighbors to keep an eye on your property.

Trampoline or pool

Having a trampoline or pool in your back yard can be fun, but your insurer may see them as an “attractive nuisance” that can tempt children to enter your yard when you’re not home. Trampolines cause more than $1 billion in emergency room visits in the United States.

If someone is injured or killed while using either of these, even without your permission, you could be held liable and sued.

Putting a fence around them can reduce risks, though some insurance companies may still not want to insure your home. Others may charge higher rates.

Dogs

Dogs aren’t part of a home, but homeowners with certain breeds of dogs can have higher rates because of increased liability.

If your dog bites someone, you and your insurer could face a liability claim. Having certain breeds, such as pit bulls, may lead to denied coverage, or only coverage if the dog is restrained or passes obedience classes.

If you can’t find insurance — even after resolving the potential problem by replacing old pipes, for example — then check with your state insurance office for help. Most states have insurance plans for disasters that are common in their area.

And when you do get insurance, you can help make your premium cheaper by increasing the deductible to $5,000 or so, but be sure to put the savings away to pay for it if needed.